A concerted research effort has brought minimum lot sizes into focus as a key element in city zoning reform. Boise is looking at significant reforms. Auburn, Maine, and Helena, Montana, did away with minimums in some zones. And even state legislatures are putting a toe in the water: Bills enabling smaller lots have been introduced [in 2023] in Arizona, Massachusetts, Montana, New York, Texas, Vermont, and Washington. The bipartisan appeal of minimum lot size reform is reflected in Washington HB 1245, a lot-split bill carried by Rep. Andy Barkis (R-Chehalis). It passed the Democratic-dominated House of Representatives by a vote of 94-2 and has moved on to the Senate.

City officials and legislators are, reasonably, going to have questions about the likely effects of minimum lot size reductions. Fortunately, one major American city has offered a laboratory for the political, economic, and planning questions that have to be answered to unlock the promise of minimum lot size reforms.

Problem, we have a Houston

Houston’s reduced minimum lot sizes from 5,000 to 1,400 square feet in 1998 (for the city’s central area) and 2013 (for outer areas). This reform is one of the most notable of our times – and thus has been studied in depth. For a summary treatment, see Emily Hamilton’s 2023 case study.

To bring all the existing scholarship into one place, I’ve compiled this annotated bibliography covering the academic papers and some less-formal but informative articles that have studied Houston’s lot size reform. Please inform me of anything I’m missing – I’ll add it.

Political economy of Houston’s reform

M. Nolan Gray & Adam Millsap (2020). Subdividing the Unzoned City: An Analysis of the Causes and Effects of Houston’s 1998 Subdivision Reform. Journal of Planning Education and Reform.

Jake Wegmann (2020). Bayou City Townhouse Boom: Does Houston Have Something to Teach Us About Pro-Climate Urban Transformation? Platform,
The University of Texas at Austin School of Architecture.

NuNu Chang (2018). Planning the Houston Way, Part II: Special Minimum Lot Size. Rice Design Alliance.

Jake Wegmann, Aabiya Noman Baqai, and Josh Conrad (2023). Here Come the Tall Skinny Houses: Assessing Single-Family to Townhouse Redevelopment in Houston, 2007–2020. Cityscape.

Big ideas

• HOA deed restrictions & opt-out options enabled the broad reform of Houston’s lot-size mandates.
• The reform slowed gentrification in low-income neighborhoods, concentrating rather in middle-income neighborhoods.
• Builders took advantage of reform to build “Houston townhouses”, which are not attached to neighboring houses and are usually 3 stories tall with a “tuck-under” garage.
• Normal fee simple ownership is a key to townhouse success. Nobody wanted condo-ownership townhouses.
• Wegmann and co-authors argue from tax data that relatively few Houston townhouses replaced single-family homes. But Dobbels and Takavalov (below) claim that 59% of townhouses are on old single family lots. This contradiction remains to be resolved.

Discussion

• Shane Phillips, Mike Manville, and M. Nolan Gray on the UCLA Housing Voice Podcast.
• Max Masuda-Farkas in The Regulatory Review.
• M. Nolan Gray and Jessica McBirney at the Mercatus Center.
• Salim Furth at Market Urbanism.

History and geography of Houston townhomes

Stephen Fox (2000). The Houston Townhouse. Cite: The Architecture and Design Magazine of Houston.

John Park, Luis Guajardo, Kyle Shelton, Steve Sherman, and William Fulton (2021). Re-Taking Stock: Understanding How Trends in the Housing Stock and Gentrification are connected in Houston and Harris County. Kinder Institute for Urban Research, Rice University.

Big ideas

• The unique “detached townhouse” is a new concept, probably owing to the 1999 regulatory reform.
  • As of 2000, Fox makes no mention of detached townhomes.
  • In 2005, Houston had about 12,000 detached townhomes and 31,000 attached townhomes.
  • From 2005 to 2018, Houston added 34,000 detached townhomes against 5,000 attached townhomes.
• Detached townhomes are common in inner neighborhoods undergoing redevelopment; greenfield development is almost entirely traditional single family and large-scale multifamily.
• Construction and demolition are more frequent in affluent and already-gentrified core neighborhoods than gentrifying ones, as shown in Figure 4.

Discussion

• Jake Wegmann at Urban Edge (Kinder Institute)
• Luis Guajardo at Urban Edge (Kinder Institute)

Who benefits from small lots?

Mike Mei (2022). House Size and Household Size: The Distributional Effects of the Minimum Lot Size Regulation. Working paper.

Gregory Dobbels and Suren Tavakalov (2023). Not in My Back Yard: The Local Political Economy of Residential Land-Use Regulations. Working paper.

Big ideas

• From Mei:
  • Small lots result in smaller houses. The average new house size in Houston declined by 10 to 15 percent when small lots were legalized.
  • A simplified model shows that smaller, lower-income families and those who have not yet bought a house are big winners. Most existing homeowners took small losses (See Figure 15).
  • The lot size reform was equivalent to a one-time gift of $18,000 to every Houston household living in a single-family home (the model doesn’t incorporate apartment dwellers). That adds up to about $8 billion.

• From Dobbels & Tavakalov:
  • If the authors’ “revealed preference” approach is correct, most incumbent homeowners dislike added density on their block. They estimate that the subdivision of 2 old houses into 4 townhouses creates a $6,900 amenity cost for each other house on a block.
  • But incumbents value the profitable sale opportunity even more. The typical homeowner comes out about $2,300 ahead.
  • 16% of eligible blocks took the “special minimum lot size” opt-out and kept the old 5,000 square foot minimum. The opt outs were more likely affluent and white.

Discussion

• Salim Furth at Market Urbanism

Yard space isn’t highly valued

Salim Furth (2021). Foundations and Microfoundations: Building Houses on Regulated Land. Mercatus Center Working Paper.

M. Nolan Gray and Salim Furth (2019). Do Minimum-Lot-Size Regulations Limit Housing Supply in Texas? Mercatus Center Research Paper.

Big ideas

• Houston area homebuyers are happy to pay more for bigger houses – but they don’t place much value on larger yards.
• In suburbs of Dallas and Austin with large minimum lot sizes, most house lots are built very close to the minimum lot size (or below it via various exceptions). See Figure 4.
  • But in Pearland, with many small lots available in nearby Houston, suburbanites are happy to buy larger-than-mandated lots.

Discussion

• Nolan Gray at Strong Towns.
• Nolan Gray and Salim Furth in the Austin American-Statesman.

Did Lot Size Reform Change Property Values?

Joseph Shortell (2022). The Effect of a Minimum Lot Size Reduction on Residential Property Values: The Case of Houston. Universitat de Barcelona master’s thesis.

Emily Hamilton (2024) addresses the same question by comparing land price growth in areas where minimum lot sizes were lowered in 2013 to areas where it had been lowered in 1999.

Big ideas

• In theory, lowering lot size mandates ought to raise the price of land while lowering the price of existing structures.
• Comparing Houston lots (which benefited from reform) to those outside the city, Shortell finds that the price of land definitely rose and the price of existing structures may have fallen (but the evidence is less clear).
• With an all-city sample, however, Hamilton finds that minimum lot size reform had either no effect or a negative effect on assessed land values.

Discussion

Nobody has critiqued or dissected Shortell (2022) yet. It is an excellent master’s thesis, but readers should bear in mind that it is student work and has not undergone peer review. Given the disagreement between these two papers – which both rely on assessment data – more research may be needed.

• Florian Martin in Houston Business Journal covers the unaffordability of larger lots.

How does small lot development handle stormwater?

Samuel Brody, Russell Blessing, Antonia Sebastian & Philip Bedient (2012). Examining the impact of land use/land cover characteristics on flood losses. Journal of Environmental Planning and Management.

Big ideas

• The authors examined the Clear Creek watershed, in Houston’s southeastern suburbs. It’s not directly a study of Houston small-lot development, though.
• They found a mixed relationship between impervious cover and flood losses. An area surrounded by “medium” coverage development (50 to 79 percent covered) fared best, even better than one surrounded by “developed open space” (0 to 20 percent).
  • The authors guess this is because denser development is usually accompanied by better infrastructure.
  • The worst-performing category was “low” coverage (20 to 49 percent).

Discussion

• Houston planners have noted that impact fees from small-lot infill development have helped fund stormwater improvements and sidewalks. Houston incentivizes shared courtyards in part because they handle stormwater better. Further research is needed on the fiscal consequences of small lot reform.
• Phil Magness offers a quick history of Houston flooding.
• Nolan Gray notes the irrelevance of zoning to flood damage.

The post Resources for Reformers: Houston’s minimum lot sizes appeared first on Market Urbanism.

Houston has long been a trivia answer as the “only big city without zoning”, but it has risen in urbanists’ estimation in the last decade as the consequences of zoning became worse in most cities and, at the same time, Houston aggressively deregulated:

• In 1998, Houston cut its minimum lot size for a house from 5,000 square feet to 2,500 or 1,400, depending on layout and lot coverage. In 2013, the reform was extended into the growing northern and western suburbs, which are mostly governed by the City of Houston as “extra-territorial jurisdiction.”
• The city latereliminated parking minimums in downtown and two adjacent areas.

So what are the things one can learn from driving and walking around Houston that aren’t clear from analyzing Harris County residential tax data or browsing satellite imagery?

1. “Car-oriented” and “sprawl” aren’t the same thing

The word “sprawl” is imprecise. But it surely does not apply to heavily urbanized areas where office towers mingle with multi-story apartment buildings. Easterners are accustomed to a dichotomy between “walkable urban” and “driveable suburban”. Much of Houston’s core is “driveable urban.” The combination seemed at its most extreme in Midtown. From a satellite view, it looks like it should be a lively urban neighborhood. But from behind the wheel, its main surface roads feel like highways.

In eastern and midwestern cities, urban cores often give way to neighborhoods where most buildings have a suburban form but the streets are still urban – they have a compact grid, sidewalks, perhaps transit, and more recently bike lanes. With upzoning, these places could become fully urban.

Houston reverses the dichotomy, placing urban buildings on suburban roads. The city is clearly trying to fix this. Where redevelopment replaces suburban-density ranch houses with dense, tall townhouses, the city appears to require sidewalk installation.

2. Design without shame

Most recent and contemporary American architecture is frankly bland. The most audacious “style” in the D.C. area is the multi-gabled “McMansion.” Houston simply has more variety and a willingness to embrace decorative or experimental styles that East Coast snobs would find tasteless.

Shameless design peaked, for us, in the artsy Montrose neighborhood. Just because you live near the Rothko Chapel doesn’t mean you have to decorate in funerary tones. Nope, go ahead and commission that Provençal farmhouse mansion.

3. Radical integration

Of course, wealthy neighborhoods get custom architecture. But Montrose shows another aspect of Houston: multimillion dollar mansions sit comfortably across the street from a dingy dingbat. This presumably reflects incomplete gentrification today or, perhaps, incomplete neighborhood decline in some previous era. But it should not be a surprise that a city that is always rising or falling with oil prices has a radical openness to integrating uses, typologies, and price points.

Perhaps – and this is speculative – the automobile orientation of even the core neighborhoods encourages greater tolerance for neighborhood diversity. A driver’s “neighborhood” is larger and more diffuse than a pedestrian’s, and the steel walls of a car give one both detachment and security from one’s surroundings.

4. Urban privacy

In the rapidly growing, hipster Heights area, urban integration includes large, outdoor breweries and restaurants. My buddies and I adopted Walking Stick Brewing, and also visited a sandlot Cajun bar, where we sat between a 3-year-old’s birthday party and a motorcycle gang. One would forgive the neighbors for objecting strenuously to the noise, which assuredly did not subside before midnight.

In most of the U.S., zoning is an important way that neighborhoods preserve privacy and quiet. And in general, I would characterize the U.S. as using space as its primary guarantor of privacy. Typical suburban homes have little, if any, fencing and prioritize grass on all sides. How does one achieve any privacy with those parameters? Only by setting the house back a few dozen feet from the road.

Other places achieve privacy in other ways. In New York City, it’s height. In San Jose, Costa Rica, it’s houses oriented inward, around central courtyards. Houstonians achieve privacy by orienting many new townhouses onto a share courtyard-driveway, sometimes gated, which creates an intermediate space between the private home and the public street. The courtyards are incentivized by city lot size rules (a courtyard-driveway counts as “open space”, while a sole driveway does not). They also use tuck-under garages to elevate the first living story, which creates vertical separation from the street.

The courtyard-driveways also provide a shared play space, as evidenced by frequent basketball hoops. Despite what Jane Jacobs may have told you, city streets are not viable play spaces for 21st-century children. But cul-de-sacs can be. Houston’s courtyard-and-grid model may be the ideal blend, unlocking the connectivity of a city while delivering the secure sociability of a cul-de-sac to a large share of homes.

Inspired

As a market urbanist, I was already a fan of Houston in theory. But the visit made me significantly upgrade my evaluation of Houston as a place. It is far more interesting than Austin, for one thing. And although it is automobile-oriented, it is definitively a city, with all that implies.

The post Houston Impressions appeared first on Market Urbanism.

This video and its logic are impressively wrong, for several reasons.
First, I’ve been to Houston and most of what I saw looks nothing like the video – there are plenty of blocks dominated by houses and the occasional condo.

Second, most of the photos in the video could have easily happened in a zoned city, because one block in a neighborhood could be residential and the next block could be commercial, so the commercial or industrial activities can be easily viewable from the residential areas (not that anything is wrong with that).

Third, most other automobile-dependent cities aren’t any prettier than Houston; a strip mall in Houston doesn’t look any worse than a strip mall in Atlanta.

Fourth, it completely overlooks the negative side effects of zoning as it is practiced in most of the United States (many of which have been addressed more than once on this site). Typically, residential zones are so enormous that most of their residents cannot walk to a store or office. Moreover, density limits everywhere limit the supply of modest housing, thus creating housing shortages and homelessness.

Finally, Houston’s negative characteristics are partially a result of government spending and regulation; as I have written elsewhere, that city has historically had a wide variety of anti-walkability policies, so it is far more regulated than the video suggests.

The post Why Houston Isn’t An Argument for Zoning appeared first on Market Urbanism.

How much should we blame planning for the degree to which cities sprawl? As much time as we (justifiably) spend here on this blog explaining how conventional U.S. planning drives excessive sprawl, it’s worth periodically remembering that, at the end of the day, the actual extent of the horizontal expansion of cities is largely outside the control of urban planning.

Consider Houston. Whenever I say anything nice about Houston’s relatively liberal approach to land-use regulation, someone invariably comments some variation of the following: “Yes, that’s all well and good in theory. But in practice, heavily regulated cities like Boston are far more urban and walkable, so maybe relaxed land-use regulations aren’t so great.”

Indeed, most of Houston is classic sprawl. But this begs the question: to what extent can urban planning policy be blamed for sprawl?

The urban economist Jan Brueckner, drawing on an extensive literature, distinguishes between the “fundamental forces” that naturally drive urban growth outward and the market failures that push this growth beyond what might occur in an appropriately regulated market. (For the purposes of this post, I’ll be using “sprawl” and “horizontal urban expansion” interchangeably. In the same paper, Brueckner thoughtfully distinguishes the two.) The latter, urban planners can address. The former, not so much.

Let’s look first at the “fundamental” variables that planners have little to no control over. Brueckner identifies three: population growth, rising income, and falling commuting costs. The first variable is obvious: as cities grow, demand for all housing goes up, and some of that housing goes out on the periphery regardless of planning policy. Metropolises like Houston, Dallas, and Atlanta are currently experiencing 2% population growth every year, meaning they are on track to double in population in the next 35 years. You would expect a lot of horizontal expansion, all else being equal!

The second variable is income. Houses are what an economist might call a normal necessity good. It’s a normal good in that, as we get richer, we spend more on it. But it’s also a necessity good, meaning that as we get richer, we spend proportionally less of our income on it. This first stage is essentially what has been happening in Sun Belt cities like Charlotte, Houston, and Orlando over the past few decades, where median incomes have in many cases doubled. With all that new demand for housing, you would expect a lot of it to go out on the periphery on greenfields, regardless of planning policy.

The third variable is commuting costs. If it’s cheap to commute long distances, people will do it. Nested in this variable is the fact of technological change and progress. The cities that are booming today are taking form in an age when most people can afford to buy a one-ton metal machine and commute alone to work at roughly 60 miles per hour. It’s easy to get far out of town, where land is cheap and even a middle class resident can afford a decent sized home on a quarter acre lot. When Boston and Philadelphia were building up and out, the big new thing in transportation was the electric streetcar, and many people still had to walk. Land values within walking distance of these transit options were unsurprisingly quite high, meaning that housing had to go up, not out. We shouldn’t expect these classes of cities to come out looking the same.

On top of Brueckner’s three variables, I’ll add two more that come up a lot in these discussions. The fourth variable is agricultural productivity. Under the standard urban model, the outer edge of a metropolis is the point at which residential, commercial, and industrial developers are unable to profitably outbid agriculture for land. That means that in regions with high agricultural productivity, you would expect to see more compact cities, and in regions with low agricultural productivity, you would expect to see more sprawling cities.

This theory has been repeatedly tested and validated. And short of running a few hundred regressions, you can intuitively work it out: in a place like Las Vegas and Phoenix, land holds no agricultural value whatsoever, so once some form of development pencils out, it happens. On the flip side, in regions of outstanding agricultural productivity like Western Oregon and Central Kentucky, rents for urban uses must be quite high before developers can outbid agricultural uses. Why do you think Lexington, Kentucky and Portland, Oregon were the first and second cities, respectively, to adopt urban growth boundaries? Because they both are home to large, power agricultural interest groups (the horse industry is quite powerful in my home state of Kentucky) and land rents were so high that the pressure to expand outward was already weak relative to other cities. Of course, as rising residential rents inch further above agricultural rents in these two cities, their growth boundaries may gradually weaken.

A fifth and final variable is landscape. No matter what all the other variables are doing, if a city is bounded by the ocean—Seattle, San Francisco, Miami—or mountains—Los Angeles, Pittsburgh, Asheville—you could expect it to quickly start building up, since it’s either very expensive or physically impossible to build out. Take a look at a random sampling of of metropolises regularly derided as sprawling—Oklahoma City, Raleigh, Columbus—and you will find that many sit on a flat, featureless plain with few barriers to horizontal growth. The effect of geographic features like this is so robust that it’s standard practice for researchers to control for them when studying topics like urban form and housing affordability.

So let’s bring it all together. Houston is a rapidly growing city, where incomes have approximately doubled since 1990 and nearly everyone can afford to commute alone by car. Agricultural productivity is not unusually high and the metropolis sits on a flat, featureless plain. It would be weird if Houston didn’t sprawl under these conditions. Indeed, it would almost be a miracle if planners and policymakers could have forced the city to do anything else.  

None of this is to say that planners and policymakers have no control over sprawl. As Brueckner and others have pointed out, virtually every U.S. city under-prices the negative externalities associated with long commutes—namely, congestion and air pollution—and fails to internalize the cost of new infrastructure involved in suburban development. At the same time, most cities—even Houston and many of its suburbs—make it tough to build dense new housing in existing urban areas and require new housing on the periphery to sit on large lots along wide roads. All of this is bad and it needs to be reevaluated. To be clear, I don’t mean to diminish the harmful impact these policies! But these market and policy failures are only part of the set of variables driving urban form.

Cities are vast, complex systems, beyond the comprehension or control of any single individual or group. As the urbanist Alain Bertaud puts it, different cities should often be treated as different species entirely; Atlanta and Barcelona have about as much in common as an elephant and a mouse. They’re both mammals, sure, but try to treat them the same and the results could be messy. All of this should leave us humbled—but not incapacitated!—about the power of planning and policy to reshape cities. And it should leave urbanists less confident in their harsh moral judgement of today’s sprawling cities. You’re not going to turn Houston into Boston. But that doesn’t mean that tinkering on the edges won’t help.

For future content and discussion, follow me on Twitter at @mnolangray.

The post How Much Should We Blame Planners for Sprawl? appeared first on Market Urbanism.

In most of my discussions of Houston here on the blog, I have always been quick to hedge that the city still subsidizes a system of quasi-private deed restrictions that control land use and that this is a bad thing. After reading Bernard Siegan’s sleeper market urbanist classic, “Land Use Without Zoning,” I am less sure of this position. Toward this end, I’d like to argue a somewhat contrarian case: subsidizing private deed restrictions, as is the case in Houston, is a good idea insomuch as it defrays resident demand for more restrictive citywide land-use controls.

For those of you who haven’t read my last four or five wonky blog posts on land-use regulations in Houston (what else could you possibly be doing?), here is a quick refresher. Houston doesn’t have conventional Euclidean zoning. Residents voted it down three times. However, Houston does have standard subdivision and setback controls, which serve to reduce densities. The city also enforces high minimum parking requirements outside of downtown.

On top of these standard land-use regulations, the city heavily relies on private deed restrictions. Also known as restrictive covenants, these are essentially legal agreements among neighbors about how they can and cannot use their property, often set up by a developer and signed onto as a condition for buying a home in a particular neighborhood. In most cities, deed restrictions cover superfluous lifestyle preferences not already covered by zoning, including lawn maintenance and permitted architectural styles. In Houston, however, these perform most of the functions normally covered by zoning, regulating issues such as permissible land uses, minimum lot sizes, and densities.

Houston’s deed restrictions are also different in that they are heavily subsidized by the city. In most cities, deed restrictions are overseen and enforced by parties to a deed, typically organized as a homeowners association (HOA) to which members are required to pay dues. When a resident in a subdivision breaks the rules of the deed, the HOA takes them to court on their own dime. In Houston, however, the municipal government covers the cost of enforcement, much like with zoning. Neighbors complain, the city reviews the complaint, sends the offending party a letter, and eventually takes her to court if her noncompliance continues.

This has at least three effects: First, this encourages the creation of overly detailed and broad deed restrictions, which might otherwise be a hassle to oversee and enforce if all the costs were falling on residents. Second, this leads to consistent enforcement of all rule violations, even in minor cases where residents might otherwise agree to let harmless violations that aren’t worth enforcing slide. Third, following on this second effect, this preserves the legal force of deed restrictions far beyond what might otherwise occur. If so many violations go unenforced, eventually courts stop enforcing certain rules or enforcing the rules in certain parts of the subdivision. This gradual withering away of deed restrictions is still somewhat common in Houston, indicating that many violations aren’t even worth the phone call to the city to complain, but it is less common under a system of municipal enforcement.

Houston further subsidizes deed restrictions in at least two other ways: First, the city will not issue permits for developments and improvements that run afoul of any deed restrictions. Second, Texas state law allows deed restrictions in unzoned cities (e.g. Houston) to be created, extended, or renewed with a simple majority of residents in a subdivision and they can be modified with the support of three quarters of residents. In every other state, unanimity among the affected parties is required to create, renew, or modify a deed restriction, as with most other contracts. Similar to enforcement, this acts as a kind of subsidy, making it much easier for subdivision majorities to adopt and maintain deed restrictions, meaning that Houston probably has far more active deed restrictions than one might find under regular conditions.

All of this might sound bad to you, and with good reason. Why should majorities be able to strip minorities of their property rights?  Doesn’t this lead to an arbitrary patchwork of regulations, undermining comprehensive planning? Why should the city pick up the tab to enforce the preferences of middle- and upper-class homeowners?

Indeed, these are all issues under a system of subsidized deed restrictions. Yet each of these issues are far more challenging under conventional land-use regulations. Under deed restrictions, residents only have the power to downzone their immediate subdivision. Outsiders have no say in the matter, but at the same time, many residential areas, and virtually all commercial and industrial areas, are almost completely unaffected. This is in contrast to conventional land-use regulation, where active minority interest groups (i.e. homeowners) can and do capture the process and dictate the property rights of entire cities.^[1] Under conventional land-use regulations, these groups nearly always decide the zoning of their local neighborhood, which can often be in conflict with regional housing or mobility planning. Again, the city then picks up the tab and enforces these preferences citywide using public resources. At most, Houston’s private deed restrictions only affect 25 percent of the city.

Yet my argument isn’t simply that deed restrictions are less bad than conventional land-use regulation. You can find that argument here. Rather, my point is that subsidized deed restrictions perform a useful political function: they give those residents with the strongest preferences for restrictions the restrictions they crave, thereby obviating the need to agitate for restrictive land-use regulations. The “homevoters” who drive land-use and zoning policy are essentially allowed to opt out of the laissez faire status quo, with some support from the city. This allows Houston to avoid having to adopt citywide conventional land-use regulations for things like land use and densities, as has happened in every other major city.

There is substantial evidence for this from Houston’s history. Consider the failed 1939 zoning push. According to Siegan, the most enthusiastic support for zoning came from Montrose, whose covenants had expired in 1936, leaving the neighborhood open to then-unwanted commercial and multifamily development. At the time, there was no city enforcement of covenants and renewal or extension often required unanimous support. This is an important point to state plainly: When their deed restrictions expired, residents started agitating for citywide zoning.

This exact same plot unfolded surrounding the failed 1948 and 1962 zoning referenda. In 1955, the deed restriction for River Oaks—an affluent white neighborhood—were set to expire after their original 30 years run (they began in 1926), after which renewal would be required every 10 years. It won’t surprise you to learn that the city’s elites, who disproportionately lived in River Oaks, became enthusiastic supporters of zoning in Houston around this time. In both referenda, River Oaks was the source of zoning support. In fact, in 1962, it was one of only two neighborhoods that voted for zoning. Again, when their deed restrictions were threatened, homeowners started agitating for zoning.

Data from the Harris County Appraisal District

There is some evidence that the same phenomenon occurred with the 1993 referendum. As you can see in Chart 1, there was a massive residential subdivision building boom in the mid- to late-1970s. Assuming for our purposes that a standard share of these developments were subject to deed restrictions, and that these deed restrictions had a standard initial run of 30 years, these deed restrictions were poised to start expiring between 2005 and 2010.^[2] If we take all this together, we would expect a zoning referendum somewhere between 1995 and 2000, with deed expirations on the horizon. Lo and behold, one arrived two years early in 1993. The narrative again comes into focus: when deed restrictions are at risk, homeowners start agitating for zoning.^[3]

The natural takeaway is that if you want to avoid restrictive land-use regulations, the city should actively support deed restrictions. That is to say, you must provide an effective and inexpensive way for those with the strongest preferences for strict regulations to “opt out” of the lightly regulated status quo. When you do that, you take away their incentive to lobby for conventional land-use regulations.

Houston history indicates that I am not the first person to figure this out. A mere three years after the failed 1962 zoning referendum, the Texas state legislature changed the law to allow Houston to enforce private deed restrictions and lowered the barriers to creating, renewing, and modifying them, which we discussed above. That is to say, they created an “opt out” option. After four decades of constant agitation for zoning beginning in the 1920s, there wouldn’t be a major push after 1962 for three decades. Within a decade of the 1993 referendum, the city of Houston again scaled up the enforcement of private deed restrictions in 2003, broadening enforcement to include things like design and maintenance rules.

This general policy of allowing NIMBY residents to “opt out” of liberalization isn’t just limited to preserving the non-zoning status quo. It also makes easing up on existing restrictions easier. In 1998, Houston policymakers substantially lowered minimum lot sizes from 5,000 to 1,400 square feet within the I-610 loop.^[4] This constituted the most dramatic liberalization of subdivision rules in any U.S. city to date.

How was this possible? Because everyone who might have preferred a larger minimum lot size either was either already shielded from the change by deed restrictions or could easily “opt out” of the new rules. At the same time that Houston lowered minimum lot sizes, they created a process whereby a majority of local residents could petition to set higher minimum lot size rules based on the prevailing lot dimensions within their local block or neighborhood. Residents with a strong preference for large minimum lot sizes had no reason to go out and raise hell about the city as a whole, as their community was protected in proportion to the preferences of local residents.

As with deed restrictions, these local minimum lot sizes are still even less restrictive than conventional land-use regulations. Not only do they only affect a limited area and require a majority vote; they also automatically expire after 40 years. Predictably, when the city expanded these newer, more liberal subdivision rules to the city as a whole in 2013 (i.e. beyond the I-610 loop), they also lowered the threshold for adopting higher local minimum lot sizes.

Is a system of subsidized private deed restrictions and “opt out” provisions the ideal policy arrangement? No. Like zoning, they can create a messy patchwork of rules and regulations for which, as far as I’m aware, there is still no public database. But we aren’t operating in the realm of ideal policy. We are operating subject to very real political constraints, namely a vocal and powerful special interest group (i.e. homeowners) that desires strict land-use regulations around their home.

This is the genius of Houston’s unique system: Let those with strong preferences for tight restrictions have them and the city as a whole can go on operating under a largely liberal land-use regime. There is a valuable lesson here for other cities: when attempting to liberalize land-use regulations, consider strengthening the private (subdivision deed restrictions) and public (stricter local rules subject to local consensus) mechanisms whereby the most powerful opponents of liberalization can simply opt out. Houston figured this out in 1965 and again deployed this strategy to great effect in the 1998 subdivision regulation overhaul. In relationships as in city planning, sometimes you have to give a little to get a little.

For future content and discussion, follow me on Twitter at @mnolangray.

^[1] Refer to Bill Fischel’s “The Homevoter Hypothesis” (2001) and associated papers, which convincingly argue that middle- and upper-class homeowners play an outsized role in determining zoning and land-use policy, particularly in smaller municipalities.

^[2] These are standard assumptions about length based on Houston history. Note that this expiration length maps onto the length of a standard mortgage. As you might have guessed, FHA and private sector underwriters were major boosters of deed restrictions, as a way to secure property values in the face of non-zoning.

^[3] If my theory is valid, expect a fourth zoning referendum somewhere between 2020 and 2026, 20 years after the 2000 to 2006 building boom.

^[4] The causes and effects of this liberalization are the topic of a forthcoming paper. Stay tuned!

The post The Case for Subsidizing Deed Restrictions appeared first on Market Urbanism.

Houston doesn’t have zoning. As I have written about previously here on the blog, this doesn’t mean nearly as much as you would think. Sure, Houston’s municipal government doesn’t segregate uses or expressly regulate densities. But as my Market Urbanism colleague Michael Lewyn has documented, city officials do regulate lot sizes, setbacks, and parking requirements. They also enforce private deed restrictions, which blanket many of the city’s residential neighborhoods.

A deed restriction is a legal agreement among neighbors about how they can and cannot use their property. In most cities, deed restrictions are purely private and often fairly marginal, adding rules on top of zoning that property owners must follow. But in Houston, deed restrictions do most of the heavy lifting typically covered by zoning, including delineating permissible uses and design standards. Whenever I point out that Houston has relatively light land-use regulations (and is enjoying the benefits), folks often respond that the city’s deed restrictions are basically zoning. This couldn’t be further from the truth.

Before I turn to the essential differences, it’s worth first observing how Houston’s deed restrictions are like any other city’s zoning. First, like zoning, Houston’s deed restrictions are almost universally designed to prop up the values of single-family houses. Despite the weak evidence for a use segregation-property values connection, this justification for zoning goes back to the program’s roots in the 1920s. Many of Houston’s nicest residential neighborhoods, like River Oaks and Tanglewood, follow this line of thinking, enforcing tight deed restrictions on residents that come out looking a lot like zoned neighborhoods in nearby municipalities like Bellaire and Jersey Village.

Second, both zoning and Houston’s deed restrictions are enforced by government officials at taxpayer expense. In most other cities, deed restrictions are overseen and enforced by a private group like a homeowners association, funding enforcement through required HOA fees. But in the aftermath of the failed 1962 referendum to adopt zoning, the Texas state legislature gave Houston the right to publicly enforce deed restrictions. This means that Houston taxpayers pick up the tab to enforce private rules regarding everything from land use to lot sizes. In 2003, these rules were expanded to allow the city to enforce restrictions related to minor issues like landscaping and architecture. In practice, this looks a lot like zoning.

Beyond these superficial similarities, deed restrictions are different from zoning in at least three crucial ways. First, deed restrictions don’t apply to the whole city. Writing in 1972, in his fantastic survey of Houston’s land-use regulations, Bernard Siegan estimates that no more than 25 percent of the city is covered by deed restrictions. Teddy Kapur, writing 30 years later, suggests a similar percentage. We have no real way of checking these estimates, since deed restrictions aren’t compiled in any kind of publicly available GIS format, but this generally comports with other estimates floating around. This is compared to zoning, which regulates 100 percent of urban land, regardless of the needs or preferences of local land users.

Where deed restrictions exist at all, they almost exclusively apply to single-family residential neighborhoods. Industrial areas and townhouses are only occasionally subject to deed restrictions, and commercial corridors and multifamily neighborhoods are almost never subject to them. Vacant land and agricultural land is also almost never subject to deed restrictions, meaning that unlike in zoned cities, this land is free to develop into the use and form most in demand at that particular time and place. In most zoned cities, acres of vacant land sit under-utilized because it’s zoned for uneconomical uses. This difference is important, since it means that policymakers don’t have to make (almost certainly wrong) guesses about the optimal use and density for all lots across all of time. All of this taken together means that nearly of three quarters of the Houston urban landscape isn’t subject to anything remotely resembling zoning and is free to change and adapt over time.

Second, deed restrictions are designed and initially implemented by people with the information and incentives to get the regulations right. Land-use regulation is, at its heart, a knowledge problem: how do we regulate, to what extent, and where? Unlike the zoning commissions or planners typically tasked with drafting zoning ordinances, the residential developers who normally develop deed restrictions have a clear, immediate signal about the desirability of their deed restrictions and a strong incentive to get them right through rising and falling property values.[1] Developers crafting deed restrictions under competitive conditions will regulate up to the point of maximizing property values and no more. To quote Siegan:

The landowner who engages, in effect, in exclusionary land use practices by restricting ‘excessive’ amounts of land risks suffering the economic sanctions of the private market, a hazard never confronted by local legislators. (79)

That is to say, implement too little private regulation, and your houses sell for less since prospective homebuyers aren’t confident that they will enjoy the amenities (e.g. purely residential community character) that they prefer. Implement too much private regulation, on the other hand, and your houses sell for less since prospective homebuyers will be forced to overproduce certain public goods (e.g. landscaping, design standards), or won’t be able to use their property as they might like (e.g. as home-based businesses). Thus, the market disciplines deed restrictions in a way that zoning is almost never disciplined, since shopping among neighborhoods is much easier than shopping among entire municipalities.

These market pressures lead to at least two interesting outcomes that distinguish deed restrictions from zoning: First, certain exclusionary regulations that are the norm in zoned cities—e.g. one acre minimum lot sizes—are relatively unheard of in Houston, since they would make it next to impossible for residential developers to outbid other land users. Second, even among single-family residential neighborhoods, the form and strictness of deed restrictions may vary by income and other factors, reflecting the obvious fact that different groups of people may have different preferences regarding how strictly—and in what way—their neighborhood should be regulated. This leads to an incredible amount of diversity among Houston’s deed restricted neighborhoods, a far cry from the standard “R-1” zoning district.

Third and finally, deed restrictions can and do adapt to changing market conditions over time. Your typical zoning ordinance is well over 40 years old. True, zoning can change through mechanisms like rezonings or variances, but these are ad hoc and frequently arbitrary, and rarely change the regulation for an entire area of town—let alone single-family residential neighborhoods. Full zoning rewrites are cumbersome and contentious. They are infrequent, and even when they occur, policymakers are loathe fundamentally change any particular neighborhood’s rules for fear of agitating vocal proponents of the status quo, irrationally afraid that any official zoning change would destroy the value of their homes. A planning professor of mine once joked, “Two things will survive the apocalypse: cockroaches and single-family zoning.”

Compare that to Houston’s deed restrictions, which nearly always incorporate expiration dates, after which the restrictions must be approved by a majority of residents every 10 or so years depending on the deed’s terms. At these intervals, residents can and occasionally do let the restrictions expire, allowing single-family neighborhoods to incorporate townhomes, apartments, and small businesses. As Kapur notes, however, residents often use these intervals as an opportunity to reconfigure the deed to reflect changing market conditions. Particularly in older neighborhoods within the 610 loop, where the original terms of the deed restrictions are often long-expired, residents are made to regularly come together to debate and discuss how they think their community should be regulated as part of the re-approval process, meeting as equals with relatively little top-down control of process.[2] This leads to the de facto upzoning of high-demand Houston single-family residential neighborhoods with surprisingly frequency, an unthinkable outcome in most zoned cities.

Outside of these regular official intervals, deed restrictions also regularly unofficially wither away, either as infractions build up unaddressed or residents forget to re-approve the deeds. This withering away of yesteryear’s regulations can and often does happen in Houston, allowing formerly single-family residential neighborhoods to gradually transform into mixed-use urban neighborhoods. Again, this is almost unimaginable in any zoned city, where regulations older than you or I are still on the books and fully enforced, regardless of how much the neighborhood in question has changed.

Make no mistake: public enforcement acts as an artificial subsidy for deed restrictions in Houston, almost certainly producing deeds that are more extensive and longer lasting than they might otherwise be under market conditions. Yet even allowing for this minor asterisk, it’s clear that Houston’s system of quasi-private land regulation is very different—and in certain key respects much better—than zoning.

Siegan concludes his discussion of this topic by perceptively noting that zoning implicitly tries to answer two very difficult questions:

1. What is the extent of protection to which property owners are entitled?
2. What powers should existing residents have to exclude other people and things from the municipality?[3]

Zoning addresses these questions using an opaque political process in which certain privileged special interests—namely homeowners—may impose their particular preferences across all time. Houston’s deed restrictions, on the other hand, are constantly rediscovering the answers to these questions. It all comes back to consumer preferences: if consumers desire things like large lots and ample off-street parking and are willing to pay more for the extra land, developers will respond by bidding up the land and implementing tight deed restrictions. If they either don’t want these restrictions, or aren’t willing to pay more for them, developers might still build the houses but with deed restrictions that allow for smaller lots, higher lot coverage, or certain complimentary commercial uses.

In this way, the process of identifying the optimal mix of land-use regulation is a dynamic discovery process, subject to ongoing changes in local conditions. As the costs of zoning stasis in cities like San Francisco become clearer, the value of understanding Houston’s uniquely dynamic system of deed restrictions only rises.

For future content and discussion, follow me on Twitter at @mnolangray.

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[1] This should not be misinterpreted as an anti-planning (or anti-planner) screed. As I have written here on the blog, planners are very good at many things and deserve more respect in these spheres. That said, nobody—however smart and well-meaning—has the necessary knowledge to plan things like future land uses and densities for an entire city.

[2] This puts much of what we might otherwise call the “deliberative” or “participatory” planning in other cities to shame.

[3] These questions are posed on page 84. For Siegan’s full discussion of this issue, I strongly urge you to read Chapter 3 of “Land Use Without Zoning.”

The post Are Houston’s Deed Restrictions “Basically Zoning”? appeared first on Market Urbanism.

In my regular discussions of U.S. zoning, I often hear a defense that goes something like this: “You may have concerns about zoning, but it sure is popular with the American people. After all, every state has approved of zoning and virtually every city in the country has implemented zoning.”

One of two implications might be drawn from this defense of Euclidean zoning: First, perhaps conventional zoning critics are missing some redeeming benefit that obviates its many costs. Second, like it or not, we live in a democratic country and zoning as it exists today is evidently the will of the people and thus deserves your respect. The first possible interpretation is vague and unsatisfying. The second possible interpretation, however, is what I take to really be at the heart of this defense. After all, Americans love to make “love it or leave it” arguments when they’re in the temporary majority on a policy.

But is Euclidean zoning actually popular? The evidence for any kind of mass support for zoning in the early days is surprisingly weak. Despite the revolutionary impact that zoning would have on how cities operate, many cities quietly adopted zoning through administrative means. Occasionally city councils would design and adopt zoning regimes on their own, but often they would simply authorize the local executive to establish and staff a zoning commission.

Houston was among the only major U.S. city to put zoning to a public vote—a surefire way to gauge popularity, if it were there—and it was rejected in all five referendums. In the most recent referendum in 1995, low-income and minority residents voted overwhelmingly against zoning. Houston  lacks zoning to this day. Meanwhile, the major proponents of early zoning programs in cities like New York and Chicago were business groups and elite philanthropists. Where votes were held, as in cities like St. Louis, support for zoning was often openly predicated on the idea that zoning would implement and preserve racial segregation. Needless to say, the poor, immigrants, and African Americans were often prevented from voicing their opposition to zoning and other racial segregation programs at the ballot box.

Yet the puzzle remains: if zoning was never popular, why did nearly every state and adopt it? Here it might help to clear up the actual origins of US zoning policy. Contrary to the popular view of zoning as a ground-up phenomenon, zoning was in fact developed, promoted, and heavily incentivized by the federal government.

Zoning as it exists today was developed by the federal Department of Commerce under future president Herbert Hoover. In 1924 and 1928, the department published the Standard Zoning Enabling Act and Standard City Planning Enabling Act, respectively, and distributed copies of each to every state legislature in the country. These acts aimed to accomplish three goals: First, to popularize the policies among legislators and provide a clear federal seal of approval. Second, to provide a model for zoning enabling legislation—legislation whereby the state allows municipalities to undertake certain police powers—and make it easy for state legislatures to quickly pass it. Finally, to secure court approval of zoning. At the time, the constitutionality of zoning was very much in doubt. Many zoning advocates both feared that poorly drafted zoning would prompt the courts to declare the policy unconstitutional nationwide and hoped that the widespread adoption of zoning would leave the courts hesitant to overturn it. Their strategy clearly worked: before 1920, just over a third of states had adopted any kind of zoning enabling legislation. By 1930, nearly three quarters of states had adopted the legislation. In 1926, a divided Supreme Court ruled in favor of zoning.

Over the next 90 years, the federal government would continue to promote and in many cases require zoning, particularly during the New Deal. In 1936, the USDA published rural zoning enabling legislation, designed to push zoning into small towns and rural hamlets. Whether or not towns and cities needed or even wanted zoning, waves of grants and technical experts were forthcoming to nudge municipalities to draft zoning ordinances.

Often, these zoning ordinances were shoddily crafted by non-locals to help municipalities meet federal mandates. After all, as the federal government played a larger role in financing state and local infrastructure projects, zoning came to be expected. Likewise, as the government entered into housing finance in 1934, low-density, racially segregated residential zoning became a necessary prerequisite to secure funding for residential projects or mortgages. Today, the expectation that towns and cities have zoning continues to show up in applications for everything from infrastructure funding to emergency relief. Under such a regime, regardless of popular support, it would be downright weird if most towns and cities didn’t adopt zoning.

None of this is to say that there were never popular constituencies for zoning. A handful of states and cities had clearly adopted zoning by their own volition, as unsavory though their motives often were. But even if we were agree that the popularity of zoning in any way excuses the program—an argument which I am highly skeptical of, see postscript—the purported popularity of early zoning remains far from settled.  

On the one hand, we have strikingly little evidence from democratic public referenda for the popularity of US zoning. On the other hand, we have a century of the federal government drafting, promoting, incentivizing and mandating zoning. Where mass movements in favor of zoning are missing, we find only xenophobic business groups and progressive technocrats in favor. All of this casts serious doubt over the idea that zoning is in the result of popular movements or enjoys mass support today. Meanwhile, Eucludean zoning’s incredible costs become clearer every day.

Postscript: Let’s take the defense that Euclidean zoning is popular on its own terms, contrary to the historical evidence. It’s not obvious that popularity qualifies as an overriding merit in all or even most cases. Sure, we live in a republic, where policy is meant to operate with the consent of the public. But we also live in a liberal republic, where all citizens enjoy certain basic rights regardless of the whims of majorities. Until quite recently, nearly every city in the country enforced some form of school segregation. When unelected judges, after much hemming and hawing, finally cracked down on school segregation—against the wishes of majorities—they did the right thing. A policy that violates basic rights, or arbitrarily expropriates property, or abuses vulnerable populations isn’t made right for being popular in this country. Even if zoning were popular, its tendency to do all of these things should make us deeply skeptical of the policy.

The post Is Zoning Popular? Reevaluating the Evidence appeared first on Market Urbanism.

You wake up thirty minutes before your alarm, jerking up after having a nightmare about a car crash. Reluctantly, you clean up, eat breakfast, and hop into your car. Work is only three mile away—easy biking distance—and there are 15 or so people in your neighborhood who work where you work—enough for a commuter bus make sense. But alas, the city required the developer to provide two parking spaces for your townhouse and the cost is hidden somewhere in your mortgage, so why not use it?

After spending thirty minutes traveling three miles on the freeway—at least we live in the Golden Age of Podcasting, right?—you arrive at your suburban office park and pull into the garage. The parking is “free,” meaning that your pay has already been docked to cover the cost of the space, so why not use it?

Your girlfriend calls shortly after lunch, asking if you want to go on a double dinner date with her friends to a new BBQ place downtown. You agree to join. You’re starving—you left lunch at home and it’s just too time consuming to drive to a decent place—so you hustle downtown. You arrive first, only to find out that there is only on-street parking. Downtown is, after all, exempt from parking requirements, and since street parking is “free,” it’s impossible to find a space during dinner time.

You call your dinner partners—each of them is driving separately from work—and suggest another BBQ place downtown that offers subsidized garage parking. This place is a little more expensive, since the restaurateur has to cover some of the cost of offering parking, but you’re all hungry and don’t want to deal with the headache of cruising for street parking. Eventually you all meet and enjoy a nice meal, speculating about how traffic and parking has gotten to be so bad in your city. Later that night, sitting in traffic on the way home, you write a review of the BBQ place on Yelp: “Delicious food. Friendly service. No free parking. 2 stars”

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Minimum parking requirements ultimately hold back even otherwise walkable neighborhoods. As has been extensively documented in the academic literature, minimum parking requirements drive up the cost of housing, drive down the density of cities, and generally lead to a lot of wasted land and capital. To put it bluntly, they make urban life next to impossible wherever they are binding, or above whatever the market would naturally provide.

Some planners and policymakers seem, aware of this issue, have carved out areas of town where there are no minimum parking requirements. Take the case of Houston: while the city generally has very relaxed land-use regulation, it maintains conventional, restrictive minimum parking requirements in vast swaths of the city. But to make urbanism viable in at least some part of the city, policymakers have removed all parking requirements from the city’s downtown. There should be way less parking than outside of downtown, right?

Unfortunately, that’s not the case. Like nearly all U.S. downtowns, Houston has acres and acres of surface parking and parking garages in its downtown. Then surely, since minimum parking requirements aren’t present, all this parking must be a reflection of market demand, right? Not exactly.

Consider the wholly conventional story I told at the beginning of this post. In Houston, parking is required at nearly every house, townhouse, apartment, office building, and factory. Had our hero convinced his girlfriend and her friends to go to a BBQ joint outside of downtown, there would have been “free” parking there too. At every stage of the average Houstonian’s day, they are provided with what looks like free parking. Of course, the “free” parking at home is bundled into a mortgage or rent. The “free” parking at work is skimmed off of your salary. The “free” parking at restaurants is bundled into the price of your meal.

This uniquely American arrangement has unfortunate results: Since you are paying for parking—one of the most substantial costs associated with urban car-ownership— almost no matter what, you may as well use it. With parking costs off of the table, you only have to consider the cost of owning and operating a car, which is fairly competitive with transit fares, especially given the added speed and comfort of a private car.

In this way, minimum parking requirements help to make car dependence the norm, regardless of special regulatory carve outs for certain areas of town. Are you really going to go through the trouble of figuring out and riding transit on the odd day that you visit downtown? Unless your city’s transit is amazing—and if you’re in the U.S., it probably isn’t—that’s pretty unlikely. You are going to drive there, and if the business doesn’t have parking, you will either pass it over or complain about it. Hence the acres of surface parking and blocks of parking garages in otherwise liberalized downtowns.

This is why we can say non-required downtown parking isn’t exactly the result of “the market.” If I am a restaurateur and I want overwhelming car-dependent Houstonians to visit, if I am a business owner and I want to attract talent from all over town, or if I am a developer and I want my residential tower to appeal to most prospective residents, the fact remains the same: I basically have to provide parking. Non-market forces—minimum parking requirements everywhere else in the town—have inflated the demand for parking, building up the expectation in the minds of residents of unlimited, unpriced, immediately available parking wherever they go.

Cities, as they exist today, are shaped by an entangled mess of decades of conflicting federal, state, and local policies. As urbanists start untangling and scrapping these distortionary policies and liberalizing our cities, they should avoid giving up halfway and conceding to baloney about the status quo reflecting “revealed preferences.” Surely, there is some degree of demand for downtown parking. But until we eliminate minimum parking requirements in the vast majority of the city, there is really no way of knowing. Anyone who wants to allow great urban neighborhoods and great downtowns to emerge and survive should press for on the citywide elimination of minimum parking requirements.

Note: I don’t mean to pick on Houston. In fact, I really like Houston, which is why I talk about it. Plus, they have great urbanists there who are working hard on these issues and might actually ease up on citywide parking requirements!

The post How Suburban Parking Requirements Hold Back Downtown appeared first on Market Urbanism.